As you probably already know, if you work full-time you are not eligible for Social Security Disability Benefits. Step one in Social Security’s Five Step Sequential Evaluation (which is the framework for determining Social Security Disability Benefits) asks whether a claimant is employed in Substantial Gainful Activity (SGA). Conceptually this is easy for most of us to understand, but what happens when a claimant is too disabled to work full-time, but is able to work part-time? What happens when a claimant volunteers 12 hours per week at the local YMCA? These questions hinge on the Social Security Administration’s definition of Substantial Gainful Activity or (“SGA”).
To be eligible for disability benefits, a claimant cannot engage in SGA. SGA is defined in the regulations as work “that involves doing significant physical or mental activities . . . [and] is the kind of work usually done for pay or profit. . . .” This is how SGA is broken down:
- (a) Substantial work activity. Substantial work activity is a work activity that involves doing significant physical or mental activities.
- (b) Gainful work activity. Work activity is gainful if it is the kind of work usually done for pay or profit, whether or not a profit is realized.
One test the SSA uses to determine SGA is the Earnings Test. The Earnings Test uses the claimant’s average monthly earnings. Thus, if an employee’s average monthly “countable earnings” exceeds the Earnings Guidelines, he or she will be found to have engaged in SGA. See SSR 83-35. The Earnings Guidelines in 2011 and 2012 were $1,000 and $1,010 respectively. Generally speaking, this means that if you work part-time and receive less than $1,010/month for your work, you will not be barred from Social Security Benefits because of your part-time work. (However, you may still be barred for any number of other reasons).
Another important test used to determine SGA, is Number of Hours Worked Test. If a claimant works 20 hours per week or more, the Social Security Administration (“SSA”) will typically conclude that the claimant is engaged in SGA. See the following hypothetical provided by the Internal Revenue Service (“IRS”):
Some weeks the taxpayer works 10 hours, some weeks 40 hours, and over the year the taxpayer works an average of 20 hours per week. Even though the taxpayer receives no compensation, works part-time, and at his or her convenience, the nature of the duties performed and the average number of hours worked per week conclusively establish the taxpayer’s ability to engage in substantial gainful activity.
(C.F.R. Title 26 § 7.105-2).
In addition to the SGA Earnings Test and the Number of Hours Worked Test, the Services Test is an evaluation of the claimant’s work activity. Simply put, this means that you cannot work as an engineer for $800/month and claim that you are not engaged in SGA.
- [A] finding of SGA will be made if the employee’s work . . . is clearly worth more than the primary SGA amount shown for the particular calendar year in the Earnings Guidelines.
So what’s the bottom line? Generally speaking, if you work less than 20 hours a week and make less than $1,010/month, you will not be barred for Social Security Disability benefits on the basis of your part-time work.